Title
COMPREHENSIVE AGREEMENT ON PROMOTION AND PROTECTION OF INVESTMENTS BETWEEN THE REPUBLIC OF CHILE AND THE SWISS CONFEDERATION
Preamble
PREAMBLE
The Republic of Chile (''Chile'') and the Swiss Confederation ('Switzerland"), hereinafter referred to as the "Parties" or individually as a "Party";
DESIRING to intensify economic cooperation to the mutual benefit of both States;
INTENDING to foster favourable conditions for investments by investors of one Party in the territory of the other Party;
RECOGNISING that the provisions of this Agreement protect investments and investors of one Party in the territory of the other Party, and are intended to stimulate mutually beneficial business activity and foster sustainable development, while preserving the right of the Parties to regulate in the public interest within their territories;
REAFFIRMING their commitment to promote sustainable development and recognising the importance of the mutual supportiveness of investment, environmental and labour policies:
REAFFIRMING their commitment to democracy, the rule of law, transparency, human rights and fundamental freedoms in accordance with their obligations under international law, including the principles and objectives set out in the United Nations Charter and the Universal Declaration of Human Rights; and
AFFIRMING their determination to prevent and combat corruption and bribery in international investment and to promote responsible business conduct;
Have agreed as follows:
Body
Chapter I. DEFINITIONS AND SCOPE
Article 1. Definitions
For the purposes of this Agreement:
(a) "claimant" means an investor of a Party that is a party to an investment dispute with the other Party;
(b) "covered investment" means an investment in the territory of a Party owned or controlled, directly or indirectly, by an investor of the other Party, made in accordance with the law of the Party in whose territory the investment is made before or after the date of entry into force of this Agreement;
(c) "disputing parties'' means the claimant and the respondent;
(d) "disputing party" means either the claimant or the respondent;
(e) "enterprise'' means any entity constituted or organised under applicable law, whether or not for profit, and whether privately or governmentally owned or controlled, including any corporation. trust, partnership, sole proprietorship, joint venture, association or similar organisation, and a branch of any such entity;
(f) "financial institution'' means a supplier of one or more financial services which is regulated or supervised in respect of the supply of those services as a financial institution under the lmv of the Party in whose territory it is located, including a branch in the territory of the Party of that financial service supplier whose head offices are located in the territory of the other Party;
(g) "financial service" means any service of a financial nature as defined in paragraph 5(a) of the Annex of Financial Services of the General Agreement on Trade in Services (GATS);
(h) "freely convertible currency" means a currency, which can be freely exchanged against currencies, which are widely traded in international foreign exchange markets and widely used in international transactions;
(i) "lCSID" means the International Centre for Settlement of Investment Disputes established by the ICSID Convention;
(j) ''ICSID Additional Facility Rules" means the Rules Governing the Additional Facility for the Administration of Proceedings by the Secretariat of the International Centre for Settlement of Investment Disputes:
(k) ''ICSID Convention" means the Convention on the Settlement of Investment Disputes between States and Nationals of other States, done at Washington, March 18, 1965;
(l) "investment" means every asset that an investor owns or controls, directly or indirectly. that has the characteristics of an investment, including the commitment of capital or other resources, the expectation of gain or profit, the assumption of risk or a certain duration. Forms that an investment may take include:
(i) an enterprise;
(ii) shares, stocks and other forms of equity participation in an enterprise:
(iii) bonds, debentures and other debt instruments of an enterprise;
(iv) futures, options and other derivatives;
(v) concessions, licences, authorisations, permits, and similar rights conferred pursuant to domestic law (1);
(vi) turnkey, construction, management, production, concession, revenue-sharing contracts, and other similar contracts including those that involve the presence of the property of an investor in the territory of a Party;
(vii) claims to money or to any performance having an economic value;
(viii) intellectual property rights; and
(ix) any other moveable or immovable, tangible or intangible property, and related property rights, such as leases, mortgages, liens and pledges.
For greater certainty:
(i) returns that are invested are treated as investments, and any alteration of the form in which assets are invested or reinvested does not affect their qualification as investments, provided that the form taken by any investment or reinvestment maintains its compliance with the definition of investment;
(ii) investment does not include an order or judgment entered in a judicial or administrative action or an arbitral award; and
(iii) ''claims to money" does not include:
(aa) claims to money that arise solely from commercial contracts for the sale of goods or services by a natural person or enterprise in the territory of a Party to a natural person or enterprise in the territory of the other Party; and
(bb) the domestic financing of such contracts;
(m) "investor of a Party'' means:
(i) a natural person who, according to the law of a Party, is considered to be its national; or
(ii) an enterprise, which is constituted or otherwise duly organised under the law of a Party and has its seat, together with substantive business activities, in the territory of the same Party;
that has made an investment.
A natural person, who is a national of both Parties shall be deemed to be exclusively a national of the State of his or her dominant and effective nationality.
(n) "investor of a non-Party" means, with respect to a Party, an investor that has made an investment in the territory of that Party, that is not an investor of a Party;
(o) "locally established enterprise" means an enterprise owned or controlled by an investor of a Party, established in the territory of the other Party. An enterprise is:
(i) owned by an investor of a Party if more than 50 per cent of the equity interest in it is beneficially owned by that investor; or
(ii) controlled by an investor of a Party if such investor has the power to name a majority of its directors or otherwise to legally direct its actions;
(p) "measure" means a law, regulation, rule, procedure, decision, administrative action, requirement, practice or any other form of measure by a Party;
(q) "New York Convention"' means the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, June 10, 1958;
(r) "non-disputing Party" means the Party that is not a party to an investment dispute;
(s) ''respondent" means the Party that is a party to an investment dispute;
(t) "returns'' means the amounts yielded by or derived from an investment and includes in particular, profits, interest, capital gains, dividends, royalties, payments in connection with intellectual property rights, payments in kind and all other lawful income;
(u) "territory" means:
(i) for Chile, the land, maritime, and air space under its sovereignty, and the exclusive economic zone and the continental shelf within which it exercises sovereign rights and jurisdiction in accordance with international law and its domestic law; and
(ii) for Switzerland, the territory as defined by its law in accordance with international law;
(v) "UNCITRAL Arbitration Rules" means the arbitration rules of the United Nations Commission on International Trade Law; and
(w) ''UNCITRAL Transparency Rules'' means the United Nations Commission on International Trade Law Rules on Transparency in Treaty-based Investor-State Arbitration.
Article 2. Scope of Application
1. This Agreement applies to measures adopted or maintained by a Party relating to:
(a) investors of the other Party; and
(b) covered investments.
2. This Agreement does not apply to claims or disputes arising from an act or fact that took place or a situation that ceased to exist before the date of its entry into force.
3. This Agreement shall not apply to government procurement.
4. Articles 5 (National Treatment) and 6 (Most-Favoured-Nation Treatment) shall not apply to subsidies or grants provided by a Party, including government-supported loans, guarantees, and insurance.
5. For greater certainty, this Agreement shall not apply to activities forming part of a public retirement plan or statutory system of social security, except if a Party allows those activities to be conducted by investors of the other Party in competition with a public entity or a financial institution.
Chapter II. INVESTMENT PROMOTION
Article 3. Promotion and Transparency
1. Each Party shall endeavour to promote investments in its territory by investors of the other Party and admit such investments in accordance \Vith its laws and regulations.
2. Each Party shall publish or otherwise make publicly available its laws, regulations and international agreements that may affect the investments of investors of the other Party.
Chapter III. INVESTMENT PROTECTION
Article 4. Treatment of Investors and of Covered Investments
1. Each Party shall accord in its territory to covered investments and investors of the other Party, with respect to their covered investments, fair and equitable treatment and full protection and security in accordance with paragraphs 2 to 7.
2. A Party breaches the obligation of fair and equitable treatment referred to in paragraph I if a measure or series of measures constitute:
(a) denial of justice in criminal, civil or administrative proceedings;
(b) a fundamental breach of due process in judicial and administrative proceedings;
(c) manifest arbitrariness;
(d) targeted discrimination on manifestly wrongful grounds, such as gender, race or religious belief; or
(e) abusive treatment of investors, such as coercion, duress and harassment.
3. Paragraph 2 shall be interpreted in accordance with Annex A (Treatment of Investors and of Covered Investments).
4. ln determining the breach referred to in paragraph 2. an arbitral tribunal established according to Chapter IV (Investor-State Dispute Settlement) may take into account specific and unambiguous representations made to an investor by a Party, which the investor reasonably relied upon in deciding to make or maintain the covered investment, but that the Party subsequently frustrated.
5. Full protection and security as referred to in paragraph 1 refers to the Party's obligations relating to physical security of investors and covered investments. (2)
6. For greater certainty, a breach of another provision of this Agreement, or a breach of any other international agreement, does not constitute a breach of this Article.
7. The fact that a measure breaches the law of a Party does not, in and of itself, constitute a breach of this Article. In order to ascertain whether the measure breaches this Article, an arbitral tribunal established according to Chapter IV (Investor-State Dispute Settlement) shall consider if a Party has acted inconsistently with paragraphs 1 to 5.
Article 5. National Treatment
1. Each Party shall accord to covered investments treatment no less favourable than the treatment it accords, in like circumstances, to investments of its own investors with respect to the management, conduct, operation, use and sale or nth er disposition of investments in its territory.
2. Each Party shall accord to investors of the other Party treatment no less favourable than the treatment it accords, in like circumstances, to its own investors with respect to the management, conduct, operation, use and sale or other disposition of investments in its territory.
3. For greater certainty, whether treatment is accorded in like circumstances for the purposes of paragraphs 1 and 2 shall be made based on an assessment of the totality of circumstances related to the investor or the investment, including the business sector in which the investor operates, character of the measure, its nature, duration, rationale and purpose, including whether the relevant treatment distinguishes between investors or investments on the basis of legitimate public policy objectives.
Article 6. Most-Favoured-Nation Treatment
1. Each Party shall accord to covered investments treatment no less favourable than the treatment it accords, in like circumstances, to investments of investors of a non-Party with respect to the management, conduct, operation, use and sale or other disposition of investments in its territory.
2. Each Party shall accord to investors of the other Party treatment no less favourable than that it accords, in like circumstances,. to investors of a non-Party with respect to the management, conduct, operation, use and sale or other disposition of investments in its territory.
3. For greater certainty, the determination on whether treatment is accorded in like circumstances for the purposes of paragraphs 1 and 2 shall be made based on an assessment of the totality of circumstances related to the investor or the investment, including the business sector in which the investor operates, character of the measure. its nature, duration, rationale and purpose, including whether the relevant treatment distinguishes between investors or investments on the basis of legitimate public policy objectives.
4. Treatment as referred to in paragraphs 1 and 2 shall not include special advantages accorded by a Party to investors of any non-Party by virtue of an existing or future agreement establishing a free trade area, a customs union or a common market or by a virtue of an existing or future tax agreement in accordance with Article 40 (Taxation Measures).
5. For greater certainty, the "treatment" referred to in this Article does not include procedures for the resolution of investment disputes between investors and States provided for in other international investment treaties, nor investment contracts concluded between a Party and investors promoting investment of such investors.
6. For greater certainty, substantive obligations in other international investment treaties and other trade agreements concluded by a Party do not in themselves constitute "treatment" and thus cannot give rise to a breach of this Article, in the absence of concrete measures adopted or maintained by that Party pursuant to those obligations.
Article 7. Compensation for Losses
1. An investor of a Party who has suffered losses relating to its investment in the territory of the other Party due to war or to other armed conflict, revolution, insurrection, civil disturbance, or any other similar event in the territory of the latter Party, shall be accorded by the latter Party, as regards restitution, indemnification, compensation or any other settlement, treatment not less favourable than that which it accords to its own investors or to investors of any non-Party, whichever is more favourable to the investor.
2. Notwithstanding paragraph 1, if an investor of a Party, in any of the situations referred to in paragraph 1, suffered a loss in the territory of the other Party resulting from:
(a) requisitioning of its covered investment or part thereof by the latter's armed forces or authorities; or
(b) destruction of its covered investment or part thereof by the latter's armed forces or authorities, which was not required by the necessity of the situation,
the latter Party shall provide to the investor restitution or compensation which in both cases shall be prompt, adequate and effective. The amount of compensation shall be determined in accordance with Article 8 (Expropriation).
Article 8. Expropriation
1. No Party shall expropriate or nationalise a covered investment either directly or indirectly through measures equivalent to expropriation or nationalisation (hereinafter referred to as "expropriation"), except:
(a) for a public purpose;
(b) in a non-discriminatory manner;
(c) in accordance with due process of law; and
(d) on payment of prompt, adequate and effective compensation in accordance with paragraphs 3 and 4.
2. Paragraph 1 shall be interpreted in accordance with Annex 8 (Expropriation).
3. Compensation referred to in subparagraph 1 (d) shall:
(a) be paid without delay;
(b) be equivalent to the fair market value of the expropriated investment at the time immediately before the expropriation took place ("the date of expropriation");
(c) not reflect any change in value occurring because the intended expropriation had become known earlier; and
(d) be fully realisable and freely transferable in any freely convertible currency.
4. The amount of compensation shall include interest at a commercially reasonable rate, from the date of expropriation until the date of payment.
5. The investor affected shall have a right, under the law of the expropriating Party, to prompt review of its claim and of the valuation of its investment by a judicial or other independent authority of that Party.
6. This Article does not apply to the issuance of compulsory licenses granted in relation to intellectual property rights, or to the revocation, limitation or creation of intellectual property rights, to the extent that the issuance, revocation, limitation or creation is consistent with the Agreement on Trade-Related Aspects of Intellectual Property Rights in Annex 1 C to the WTO Agreement.
Article 9. Transfers
1. Each Party shall permit all transfers relating to a covered investment to be made freely and without delay into and out of its territory. Such transfers shall include:
(a) contributions to capital, including initial capital and additional amounts to maintain or increase the capital;
(b) profits, dividends, capital gains, and other returns, royalty payments, management fees, technical assistance fees and other fees;
(c) proceeds from the sale of all or any part of the covered investment or from the partial or complete liquidation of the covered investment;
(d) payments made under a contract including a loan agreement;
(e) payments made pursuant to Article 7 (Compensation for Losses) and Article 8 (Expropriation); and
(f) payments arising out of the settlement of a dispute.
2. Each Party shall permit transfers relating to a covered investment to be made in a freely convertible currency at the market rate of exchange prevailing at the time of transfer.
3. Nothing in this Article shall be construed to prevent a Party to restrict or delay a transfer through the equitable, non-discriminatory and good faith application of its laws relating to:
(a) bankruptcy, insolvency, or the protection of the rights of creditors;
(b) issuing, trading or dealing in securities futures, options or derivatives;
(c) criminal or penal offences;
(d) financial reporting or record keeping of transfers when necessary to assist law enforcement or financial regulatory authorities;
(e) taxation;
(f) ensuring compliance with orders or judgments in judicial or administrative proceedings; or
(g) social security, public retirement or compulsory savings schemes.
4. This Article is subject to Annex C (Transfers -Chile).
Article 10. Restrictions to Safeguard Balance of Payments
1. Where a Party is in serious balance of payments or external financial difficulties or under threat thereof, it may adopt or maintain restrictions on payments, capital movements or transfers related to investments.
2. Restrictions adopted or maintained under paragraph 1 shall:
(a) be consistent with the Arhcles of Agreement of the Internahonal Monetary Fund;
(b) avoid unnecessary damage to the commercial, economic and financial interests of the other Party;
(c) not exceed those necessary to deal with the circumstances described in paragraph 1;
(d) be temporary and be phased out progressively as the situation specified in paragraph 1 improves;
(e) be applied on a national treatment basis; and
(f) ensure that the other Party is treated as favourably as any non-Party.